Barclays bank joins Help to Buy scheme

The announcement now means mortgage lenders covering about two-thirds of the market are now in the scheme

An announcement on the specific details of mortgage products will come "in due course"

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Barclays has become the latest mortgage lender to join the Government's flagship Help to Buy scheme.

The latest news now means that providers covering around two-thirds of the market are now on board.

The Help to Buy scheme, aiming to lend state-backed mortgages, began this week after the Government brought the launch date forward from January.

The Government is offering £12 billion worth of guarantees under Help to Buy to encourage lenders to offer mortgages to credit-worthy home buyers with deposits as low as 5%.

So far, just a handful of lenders have launched products under the new phase of Help to Buy, with state-backed Royal Bank of Scotland (RBS), NatWest, Halifax and Bank of Scotland taking applications from this week.

Of the biggest mortgage lenders, only building society Nationwide, which had a mortgage lending share of around 15% last year, is still to decide whether or not it plans to take part.

Other lenders to confirm participation, Santander, HSBC, Lloyds Bank, Virgin Money and Aldermore, are expected to give more details about deals they plan to offer nearer to launch dates.

Barclays' brief announcement on Twitter said: "We are pleased to confirm that Barclays will participate in the Help to Buy mortgage guarantee scheme."

A spokesman for the bank declined to give any details about the mortgage products that will be available or exactly when customers will be able to take out these deals, saying more information will be announced "in due course".

While the new scheme is expected to spark more competition and widen borrower choice as the major players return to the 5% deposit market, experts have pointed out the rates on offer under Help to Buy were not hugely different from what was already available.

Yorkshire and Clydesdale Banks, which are still deciding whether or not to take part in Help to Buy, today cut the rate on a three-year fixed rate mortgage to 4.99% for people with a 5% deposit.

As well as matching the rate being offered by NatWest with their fee-free deal, Yorkshire and Clydesdale are also offering borrowers £250 cashback on completion.

However, the scheme has fuelled fears of a housing boom as it comes at a time when house prices in London and the South East in particular have already been rising strongly as demand from potential buyers has been outstripping the supply of homes on the market.

Before the new phase of Help to Buy was launched, only a handful of providers were offering deals to people with deposits as low as 5%, with just 44 products available compared with 700 products for people with a 20% deposit to choose from.

But borrowers taking out a Help to Buy mortgage will still face tough checks to make sure they can afford repayments.